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The familiar pattern of Chinese consumption growth

Author

Listed:
  • Paul Hubbard

    (Treasury, Government of Australia)

  • Samuel Hurley

    (Treasury, Government of Australia)

  • Dhruv Sharma

    (Treasury, Government of Australia)

Abstract

Since the beginning of China’s ‘reform and opening up’, high rates of investment spending have dramatically expanded the productive capacity of the Chinese economy, and accommodated the migration of hundreds of millions of rural agricultural labourers to the industrial and services sectors. This has underwritten a sustained boom in Chinese household consumption, even though it has declined as a share of Chinese GDP. While unique in its magnitude, China appears to be following the same development path of Japan, Korea and Singapore. As the migration of the labour force from agriculture to urban based industry runs its course, and as higher income consumers demand more labour intensive services, household incomes — and with it household consumption — is likely to stabilise as a share of GDP.

Suggested Citation

  • Paul Hubbard & Samuel Hurley & Dhruv Sharma, 2012. "The familiar pattern of Chinese consumption growth," Economic Roundup, The Treasury, Australian Government, issue 4, pages 63-78, December.
    • Handle: RePEc:tsy:journl:journl_tsy_er_2012_4_3
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    References listed on IDEAS

    as
    1. Barry Eichengreen & Donghyun Park & Kwanho Shin, 2012. "When Fast-Growing Economies Slow Down: International Evidence and Implications for China," Asian Economic Papers, MIT Press, vol. 11(1), pages 42-87, Winter/Sp.
    2. Brendan Coates & Dougal Horton & Lachlan McNamee, 2012. "China: prospects for export-driven growth," Economic Roundup, The Treasury, Australian Government, issue 4, pages 79-102, December.
    3. Veasna Kong & Adam McKissack & Dong Zhang, 2012. "China in a new period of transition," Economic Roundup, The Treasury, Australian Government, issue 4, pages 42-62, December.
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    Cited by:

    1. Brendan Coates & Dougal Horton & Lachlan McNamee, 2012. "China: prospects for export-driven growth," Economic Roundup, The Treasury, Australian Government, issue 4, pages 79-102, December.
    2. Agnes Szunomar (ed.), 2014. "Chinese investments and financial engagement in Visegrad countries - Myth or reality?," Economic books, Institute for World Economics - Centre for Economic and Regional Studies, number 201411.
    3. Veasna Kong & Adam McKissack & Dong Zhang, 2012. "China in a new period of transition," Economic Roundup, The Treasury, Australian Government, issue 4, pages 42-62, December.

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    More about this item

    Keywords

    Chinese economy; consumption; rebalancing;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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